Is There a Way to do Referral Marketing…. Better?

A C[IQ] associate has been working to establish a hardy referral marketing program for a client. In her research, she came upon this report and the author company Extole. She was underwhelmed by 'best practices.' Most referral programs, appear to ...

--Blast on Social. Every brand, product or purchase can now be shared on social media channels. But is this actually used? Have you seen a friend promote a product to their followership? Why not? Because retailers aren't giving customers shareable content in context.

--Promote Me! Promote the Brand! Consumers have become discerning and hyper-aware of when they are being "used" to help sell product. Even if they heart your brand, it does not mean they will sell to their friends or prosthelytize on your behalf. Many marketers assume that if they offer a financial incentive it will galvanize customers to share. Nope. Most referral programs get lackluster results because 1) They don't offer valuable and shareable content or 2) They don't serve the brand community. Value, by the way, is not just dollars. Valuable content could be a coupon, but it could also be any information that saves a friend time or makes something more convenient.

For example, suppose a Holiday Card e-tailer that prints customized family pictures targets mothers who visit their site in December to refer a fiend. Instead of offering 25% off their next purchase for introducing to a friend, offer to typeset or print their address labels or a platform to email holiday greetings. Such services add value by saving time and complication.

A community is a group of people with shared interest or experience. Your customers -- by virtue of experiencing your products or brand -- have had a shared experience. Not to mention that they are psycho-graphically similar. Nurture them. Promote the community and its common bonds, rather than your product. It bonds the customer to the brand, and often produces content that is far more valuable than a coupon.

Even experts appear to get lured by tactics -- such as social blasts, incentives or 'gamification' -- when peer to peer sharing is all about the social bonds, not technologies. 

Advocating for Your Loyalists

During a webinar recently entitled “Using Social Data to Build Deeper Customer RelationshipsSusan Etinger of the Altimeter Group pointed out that 60% of social media discussions about a product or brand occur after a purchase. 

For a consumer, this makes perfect sense. “Absolutely loving this pair boots I just got from Cole Haan” appears more often than, “OK, so I need a new pair of boots. Any recommendations?

Marketers tend to monitor for pre-purchase social media signals to gauge the consideration set.  But post-purchase is just as important to move the customer along their lifecycle to a brand loyalist and utlimately, an advocate.  So, what’s the difference between a loyalist and an advocate?

In our experience, a “loyalist” is one who will repeatedly purchase the same (or new versions) of a product from a brand (and no other competitors'), and will consider a new product offering from the brand before looking to another. 

Similarly, we know an "advocate" is one who is generally a loyalist and who - without prompting - will favorably speak of, promote, or "advocate" for the product at least, and often the brand in general.

(We'll save the reason for suggesting "generally" above for another time ;-)

Importantly, of these two types of regular customers, only one will tend to speak up for the product without being asked or prompted.

To that point, in a C[IQ] meeting last week, a principal raised the issue of whether a loyalist can evolve into an advocate on their own (even in light of social media).  In other words, if an advocate is willing to speak up without prompts or incentives to do so, how do we move a loyalist to that next stage?  You see, the differentiator is simply that loyalists, while valuable they are for their RFM, generally need prompting to speak up.

Returning to our example of the pair of boots. With this model, an advocate would say, “I just bought a pair of Blundstone boots, and love them;” the loyalist, however, would likely respond to a request for recommendation as, “I’ve bought several pairs of Blundstones…they are my go-to fashion boot.”

Converting customers into brand advocates is a much-discussed topic in marketing.  And last week an HBR blog post offered ideas to help with the transition, among them these three: bring customers together; give them a venue to showcase their knowledge; and promote your "customers," not your "brand."

We submit loyalists are often overlooked as the best candidates to become your brand advocates.  This is important because of the pop trend in "social CRM" to become overly enthused by social signals and status alone.  However, these talkers may not be your real loyalists, let alone your best advocates.  So, here is our suggestion of how to identify, access and engage your real loyalists for advocacy: 

  1. Determine the criteria for a loyalist
  2. Analyze your house file to extract this group
  3. Study their characteristics, qualities, and shopping behaviors
  4. Choose a mechanism for advocacy (e.g., the HBR blog post)
  5. Prompt your loyalists to become your advocates.

We'll assume you have your criteria for what constitutes a loyalist.  The step of qualifying those loyalists requires a bit further (or deeper) analysis -- that's step 3.  But, no need to panic, this is the art (and science) of developing your customer IQ.  The science is extracting and correlating data from the house file, your web analytics, and other sources.  The art is interpreting that data to identify those you wish to prompt.

The key is the prompting. By properly identifying customers who are most likely loyalists, and determining how best to approach them, you now can encourage them to become advocates.

We cannot over-emphasize the importance of prompting.  If you fail to pro-actively reach out to your best customers (who you have permission to contact) and encourage their conversations, you're missing an opportunity to engage those who may ultimately be your greatest advocates, but are simply waiting to be asked.

We can't leave without at least an elementary example.  Shown here is an eMail "prompt" for a customer to consider speaking up on behalf of the brand; not waiting for her to (maybe) do so on her own.  Cleverly worded, this prompt suggests her sharing will be heard by not only other customers or potential buyers, but the brand as well (i.e.,  the designers).

Are marketers over-training on advocates? At the end of the day, how important do you think it is to move loyalists to advocates?  Please share your thoughts below.  Enlighten us.


Social Media is a Good Thing, Until its Not

Last Fall the British government established an independent panel to try to make some sense of what happened during that fateful five days of riots 06.August to 10.August.   They looked at all aspects of the social phenomenon of lawless havoc.  One of the more interesting elements they considered were charges that social media may have been largely responsible or at least a catalyst. What caused our tail to straighten and ears to perk was the notion that the government might need a "kill switch" of some sort for social media services including texting and Twitter to prevent a recurrence of this scourage of illegal assembly (or disassembly as the case may have been.)

In particular, reported the Guardian newspaper, Steve Kavanagh, the deputy assistant commissioner of the Metropolitan Police charged that "Inflamatory and inaccurate messages on Twitter were the primary culprits of the melee."  

"Social media and other methods have been used to organise these levels of greed and criminality."

Our Take: Sure, social media is to blame in exactly the same way flyers, banners, telephones, fax machines, and bull horns were the principal culprits behind riots of the industrial age.  We're going to go out on an intellectual limb here and suggest that if you're going to blame the tool, you're unlikely to be very successful at quashing a riot.  If people want to speak out, they're going to speak out; whether they charge up the battery and speak through a bull horn, or charge up their phone and let their thumbs do the talking. But that's not really our point today.

Actually, our Friday's "Parting Shot" is about to be fired, so read on.

You see, this independent U.K. panel recently published an interim report, and their response to the social media question (also reported in the Guardian) is eye widening:

On the role of social networks, the panel concluded that rioters were aided by instant messaging services but warned against plans to shut down websites such as Twitter and Facebook. They pointed out that the UK has pledged support for the open use of social media during the Arab spring uprising across the Middle East.

"Mobile communications technology is continually evolving and new developments may benefit the police and authorities rather than rioters," the panel concluded. They added that some mobile networks have installed systems to detect crowds and the direction they are moving in so they can manage congestion.

"In the future, it may be possible to use cell congestion monitoring as a tool to tackle rioting," the report found. "What is clear from the riots is that there is no simple 'switch off' solution. Viral silence may have as many dangers as viral noise."

To us, the highlight is the naked comparison to the Arab spring riots. That's a disruptive topic, with many people vigilantly defending rioters in a stable democracy (United Kingdom or here at home in the USA) as fundamentally different than those in living under an oppressive government (Syria).  While we understand how people have less sympathy for the former, this argument should be concerning because it is used as justification for stronger methods of stopping riots (e.g., a "kill switch" for Blackberries and Twitter).

We think that produces an unsettling paradox: the idea that oppressive measures are acceptable, but only for non-oppressive governments.  While it's simple to look at some of the London rioters and see spoiled kids acting like thugs, we should be careful: Bashar al-Assad views the rioters in his country the same way.

And by the way, in as much as rioters used digital media (perhaps Blackberry Messenger more than Twitter from what is being learned), Twitter and other social media tools were also used to organize clean up efforts and emergency medical assistance.

So, we applaud the London investigative panel in their acknowledgment of the double-standard that could emerge as quoted above, because it raises a serious paradox (not to mention the trouble with blaming the tool).  It provides this unsettling notion of recognizing that...

Social media is a good thing... until its not.

It shouldn't take too much noodling to apply the learning from this to your own social media strategy for customer relationship management in general, and brand management in particular.